Posted - 2008.12.22 18:28:00 -
[3]
Though I admit that I am engaging in a bit of commentary, the offer is actually real should somebody want to take it.

It certainly won't bother me if nobody does. I have provided essentially no proof that I am good for it other than some sort of 'reputation'. It would seem to me that in theory I have failed all the reasonable standards for receiving funds. However, many of the IPO's I have seen do little better.

So, if you are willing to gamble 500m of your money on the chance you will get 100m back, then I will make you that offer.

Posted - 2008.12.22 18:38:00 -
[5]
DBANK offers 10% per month back currently on their 4 month CD. lol I'm sure anyone reading this would hopefully get that much out of your post. =D

But yeah I see what you're saying. I haven't been reading this forum heavily but for maybe the past month, and some IPOs offer hardly any info. They probably just haven't had time to become acclimated with this board.--------------------

Posted - 2008.12.22 18:42:00 -
[6]Edited by: Lexander Morinex on 22/12/2008 18:44:16Actually, this is NOT a joke forum. It is a real offer.

I do work for DBANK, and I believe I am authorized to invest the regular 500m a month in DBANK. Because I like to control my own money, and have a small enough amount of it that I can still control it, I don't tend to invest my ISK, I simply use it myself.

But, that 500m slot is sitting there unused, and it is possible somebody else who has maxed out their 500m might be interested in getting a return. Hence my offer.

The only 'joke' in this thread is the same joke all these other IPO's are offering, that of far too little proof.

Originally by:LaVista VistaI have a 1,5% and a 3% account with EBANK. You don't see me "renting" it away.

I think it's a poor show to do so.

I can see that.

To me, I was more interested in the concept of it than anything else. For the reasons previously stated, I don't actually have investments in anything that I don't directly control. Since my role in DBANK is focusing more on risk management I deliberately don't have access to the funds. But here I am, potentially sitting on an arbitrage opportunity, and I am not using it.

A split is easiest, but in theory I should offer whatever the lowest bidder was willing to take. I still make money if I give 9% of the 10% I would make, so in theory I should have no difficulty doing so. Hmm, another interesting possibility.

Oh well, I don't really care if I get an offer or not. This kind of thing interests me less for the moneymaking potential but for the social exercise in decision making. I like to see how these things resolve themselves and learn from the experience.

Posted - 2008.12.22 22:33:00 -
[11]
Quite frankly, I think Lexander perfectly fine to be doing this. Sure, it may not be the best PR, but it's a great concept that really should be explored more in this forum. In theory, if DBANK were to fold and lose the money in the CD, Lexander would still make the interest payments and return the capital. He's counting on DBANK to stay around, and I don't doubt that inside knowledge informs this confidence. Still, there's always a chance that it might fail.

I do something quite similar with a private bond that I manage; I pay 4% on it, and with most of the cash I turn around and invest it in higher-rate bonds, as well as in institutions like DBANK. If one of my investments goes sour, I cover the loss, but in the meantime I reap the profits.

Honestly, I don't quite understand why it's bad PR for Lexander to make this offer anyway.

Originally by:cosmorayThe point your missing is that you work directly for the bank.You should be either promoting it, explaining policy, answering questions.

Employees should not be starting these types of thread and cross selling your accounts.I like some of your posts but you miss the point about PR.

First rule of PR, keep your mouth shut unless you have to.

Fair enough. I think you are correct, so I hereby withdraw the offer.

- Lexander Morinex

P.S. The more I think on this, the more I recognize the mistake. Oh well, that is what I get for thinking of something in the morning before my tea and tired from a long weekend of moving furniture. Time to admit I made a mistake and try to move on.

Not everyone can admit when they're wrong, so don't be too hard on yourself, man. =)--------------------

Originally by:Packtu'saQuite frankly, I think Lexander perfectly fine to be doing this. Sure, it may not be the best PR, but it's a great concept that really should be explored more in this forum. In theory, if DBANK were to fold and lose the money in the CD, Lexander would still make the interest payments and return the capital. He's counting on DBANK to stay around, and I don't doubt that inside knowledge informs this confidence. Still, there's always a chance that it might fail.

I do something quite similar with a private bond that I manage; I pay 4% on it, and with most of the cash I turn around and invest it in higher-rate bonds, as well as in institutions like DBANK. If one of my investments goes sour, I cover the loss, but in the meantime I reap the profits.

Honestly, I don't quite understand why it's bad PR for Lexander to make this offer anyway.

Though I agree with these points in principle, I have some concerns about the conflict-of-interest aspect. When I proposed this, I didn't really see any. As a 'private individual' I can invest in DBANK, and I can provide that funding any way I desire. However, after thinking about it for a bit, I would rather preserve the good reputation of DBANK than make a small bit of extra money.

Originally by:Lexander MorinexI have some concerns about the conflict-of-interest aspect. When I proposed this, I didn't really see any. As a 'private individual' I can invest in DBANK, and I can provide that funding any way I desire. However, after thinking about it for a bit, I would rather preserve the good reputation of DBANK than make a small bit of extra money.

Fair enough. However, I have no affiliation with DBANK, and I've got a corporate account with a clean deposit record. So, I'll take Lexander's offer and extend it to the public if anybody is interested, with a limit of 1bn and a return of 6%.

I'm mostly curious to see if anybody takes me up on it. I think it's a concept that could use a lot more exploration in EVE. I currently do it in a private arrangement with 15bn, and it seems to work quite nicely. The investor wants low risk and low return, and I'm willing to take risks to make a profit.

Originally by:Stealing HonestWhat i find most interesting about this thread is how the idea morphed. The competition shouts down the idea, then someone picks up the idea and says hey ill run with it, and now we have copy-cat threads starting with the same idea/scam of this exact shady idea.

Quite frankly, it's not a new idea by any means. Maybe it hasn't been popular in MD in this exact form, but the concept has been around and the concept has been put into practice. Blaming Brock Nelson for running with the idea is like blaming every other IPO in the game for stealing Serenity Steele's idea.

Posted - 2008.12.23 05:17:00 -
[19]
Pack and I were discussing this, he did noticed that DBank had a total of 67% isk allocated to 4 month 10% CD. So, what happens when April comes up will be interesting. A mass withdrawal that leaves DBank unstable when customers are no longer able to make 10% CDs? Or will people continue to make CDs?

Either way, I'm mitigating risk (Pack's word) away from the investor by putting on some of my asset in event worse case scenario occurs.

For everybody else, they can do anything they want but in the end, people are making the choice, will they put their money in someone who is offering them risk-free, known to MD or put their money in someone who is offering them with risk and unknown?

Originally by:Stealing HonestMy next question is, how many account holders running this scheme will put pressure on Dbank, and Ebank if it works a few times and then becomes wildly popular.

I doubt EBANK will feel much pressure at all. If their rates are any indication, they don't need to use their money to compete effectively. There was one bond a while back which offered the returns from an EBANK 3% account, but even that doesn't put any additional strain on the bank; that account was already there and expected to be earning interest anyway.

The issue arises with DBANK that with the announced adjustment of their rates, they face a rapid influx of cash now while the 10% CDs are still available and a general exodus of funds over the four months following the new year. A little bit of watching their statistics page says a lot; total liability has increased significantly over the last month, and the majority of that liability remains in 4-month CDs. This rate change is part of why Brock Nelson's bond is so interesting; it's a question of whether or not DBANK can effectively utilize its capital to meet the temporarily increased demand over the next four months while also managing its liquidity well enough to serve withdrawals which may greatly reduce the amount of ISK in the bank.

Posted - 2008.12.23 05:56:00 -
[21]Edited by: Lexander Morinex on 23/12/2008 05:57:04Edited by: Lexander Morinex on 23/12/2008 05:56:35The interesting thing about the situation with DBANK is that if all the depositors left today, then the company would close after having produced a pretty tidy little profit.

I certainly hope that depositors continue investing even with lower rates. The lower rates will help reduce the viability of any 'scheme' such as the one proposed. However, I must admit that I personally hope that the growth of DBANK slows. The current exponential growth rate is provably unsustainable. Fortunately growth is limited by the current caps, which prevent truly exponential growth from continuing indefinitely.

DBANK will continue to provide a solid core of investments for depositors. Speaking on my own and not for DBANK as a whole I am really hoping the high interest rate CD's eventually fade and we offer a much better line of low interest rate investments that people can invest in. I think the CD's have been good for growth but bad for the secondary market.

The question then becomes simple enough. Do you trust us? One of the roles I am working in is establishing internal processes to improve our risk management. Somewhat ironically, part of this is establishing policies that would prevent any conflict of interest.

Originally by:Brock NelsonThe competition didn't shoot down this idea, they merely said it was unethical, especially for a head of the corporation.

One technical point. I am not the head of the corporation, or even a member of the board. I have no actual decision making power. However, the point is sound about the ethical issues raised.

This whole idea is nothing more than a type of interest rate swap. The opportunity exists because of the limits placed on single investors and the additional risk posed by adding a middle tier into the system. The danger with any such swap is the issue of leverage and credit risk. I originally proposed it because I was interested in both making a little extra money and also seeing if anybody would take me up on it. As it is, the entire discussion that has resulted has more than satisfied my intellectual curiosity.

Posted - 2008.12.23 06:12:00 -
[23]
Lex, DBank will continue, I don't believe that everybody will drop DBank as soon as the 4 month CD is up in April. Simply because by then DBank will have reputation and trust that is as good as EBank. DBank took a step toward that end by bringing people like yourself and Xabier aboard, both of you who have good history and reputation on MD.

Originally by:cosmorayThe point your missing is that you work directly for the bank.You should be either promoting it, explaining policy, answering questions.

Employees should not be starting these types of thread and cross selling your accounts.I like some of your posts but you miss the point about PR.

First rule of PR, keep your mouth shut unless you have to.

Fair enough. I think you are correct, so I hereby withdraw the offer.

- Lexander Morinex

P.S. The more I think on this, the more I recognize the mistake. Oh well, that is what I get for thinking of something in the morning before my tea and tired from a long weekend of moving furniture. Time to admit I made a mistake and try to move on.

I see nothing wrong with him using DBANK as a means of making money. Yes, he works for them but that shouldn't prevent him from using the tools availiable to him to make more money. Granted there may be a conflict of interest in this offering, if it is one, but I see little risk of it failing. DBANK would have to dissolve to lose the money. And I don't think he's going to scam for 500m to lose his job there.

Originally by:Packtu'saHonestly, I don't quite understand why it's bad PR for Lexander to make this offer anyway.

Neither do I.

The only problem with Lexander's proposal is that he fails to remember that DB will lower its rates from January 1st. If he gets a taker before that date, fine, he can make the 4-month CD at 10% per month, but after the 1st the interest rate is lower. IIRC it is 7% per month.

Apart from that, it's a fine proposal, and something I've thought about doing myself a few times. Except of course it would look kind of ponzi'ish, in spite of not being that, and if DB did tank I wouldn't be able to cover the return I've promised since all my ISK (save half a billion or so) are with DB.

Originally by:Brock NelsonLex, DBank will continue, I don't believe that everybody will drop DBank as soon as the 4 month CD is up in April. Simply because by then DBank will have reputation and trust that is as good as EBank. DBank took a step toward that end by bringing people like yourself and Xabier aboard, both of you who have good history and reputation on MD.

7% on 4-month CDs, which IIRC is the new interest rate, is still pretty good, so I agree with you. Few will drop Dynasty Bank.

Originally by:Brock NelsonLex, DBank will continue, I don't believe that everybody will drop DBank as soon as the 4 month CD is up in April. Simply because by then DBank will have reputation and trust that is as good as EBank. DBank took a step toward that end by bringing people like yourself and Xabier aboard, both of you who have good history and reputation on MD.

7% on 4-month CDs, which IIRC is the new interest rate, is still pretty good, so I agree with you. Few will drop Dynasty Bank.

I agree, if anything the lower interest rates may incrase deposits as some will see it as more sustainable.

Originally by:Packtu'saHonestly, I don't quite understand why it's bad PR for Lexander to make this offer anyway.

Neither do I.

The only problem with Lexander's proposal is that he fails to remember that DB will lower its rates from January 1st. If he gets a taker before that date, fine, he can make the 4-month CD at 10% per month, but after the 1st the interest rate is lower. IIRC it is 7% per month.

Apart from that, it's a fine proposal, and something I've thought about doing myself a few times. Except of course it would look kind of ponzi'ish, in spite of not being that, and if DB did tank I wouldn't be able to cover the return I've promised since all my ISK (save half a billion or so) are with DB.

As I have always understood this, a 10% CD purchased this month is 10% for all 4 months. What I was essentially selling was 'one last shot' at the 10% rate split 50/50. Even if I was wrong and it did drop to 7%, that wouldn't bother me, since even 2% would be fine. Anyhow, the point is moot for me.

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